reported that during an interview with the FT 81-year-old George Soros proposed that a longer term solution to the eurozone crisis would be a European Fiscal Authority (EFA) fund that "will buy the bonds with European Treasury Bills issued and backed by the ECB and every euro zone member-nation."
Soros outlined his proposal, saying "Banks are currently holding more than 700 billion euros ($878 billion) of surplus liquidity at the ECB, earning only one quarter of one per cent interest. This assures a large and ready market for the Bills at one percent or less.” In conjunction with the fund EFA authorities would be able to issue penalties against countries that failed to adhere to debt reduction programs.
Soros warned “If the rest of Europe is united behind this proposal and the Bundestag (German parliament) rejects it, Germany must take full responsibility for the financial and political consequences.”
Soros has long expounded that German Chancellor Angela Merkel has initiated a flawed policy to handle the eurozone crisis. In February he told Der Spiegel
"she is leading Europe in the wrong direction" as he once again advocated the need for stimulus to avoid a "deflationary debt spiral."
reported Soros, during an interview with Bloomberg Television on Sunday, warned that unless fiscal disagreements between Germany and other European nations are "resolved in the next three days, then I am afraid the summit could turn out to be a fiasco. That could actually be fatal.”